(Editor’s note: A version
of this essay was first published in the January 1998 issue of The Freeman, the
journal of
the Foundation for Economic Education. The growth of contracting out for
support services by school districts has risen steadily in the years since and
the arguments in its favor raised here are even more relevant and applicable
today.)

It may seem strange at first, but one of the great
virtues of anything "private" is also an obstacle to making its case to a
skeptical public. That virtue is this: if it’s private, it will be held to a
higher standard than its "public" counterpart.

Indeed, a favorite ploy of statists is to judge a
private activity, institution or proposal against some imagined ideal, which
makes it automatically defective by comparison every time. It often doesn’t
matter how superior the private sector is over the public sector; if what’s
private comes with any warts at all, the statist usually says, "Obviously we
can’t do that, so let’s stick with government" — even if it is a wart
hog.

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Should education be handled in the marketplace,
rather than by government? The statist warns that if education were privatized,
some people might get rich while some children would fall through the cracks. So
we keep the education status quo, wherein the leaders of teachers unions rake in
six-figure salaries as millions of children, at great expense, go uneducated.

This mentality translates into an untenable
situation when it dominates public debate: it means we end up tolerating the
awful to avoid the better-but-less-than-perfect. The private sector is indeed
held to a higher standard than the public sector, as it should be — but we’ve
got to find ways to turn this virtue to a distinct advantage instead of a
setback. One way to do that is to be equipped to explain vividly the
shortcomings of government action.

No better example comes to mind than one in which I
was recently and personally involved. I was arguing before a large audience that
if one is not yet sold on privatizing the schools, then at least privatizing
certain aspects like
food service could save the taxpayers some money and improve the quality.
But to the approval of many nodding heads, the first questioner revealed the
bias I’ve described above: "If private firms take charge of the food, the
children will be at risk. Private companies are interested only in profit and
they really don’t care about the kids. To make money, they’ll cut corners and
who knows what they would end up serving for lunch. Keep our cafeterias public,
not private, because government has only the kids’ best interests in mind."

That objection sounds plausible only until you look
at the real world. The fact is that while problems have arisen in both public
and private cafeterias, private ones usually have stronger incentives to prevent
them from occurring in the first place and to fix them quickly when they do
happen. I drove home the point with a poignant story.

If you think public cafeterias are safer, I said,
you didn’t see a revealing story in The Detroit News on Oct. 17, 1996. Headlined
"Many School Cafeterias Unclean: Health Inspectors Find Mice, Bad Food At Area
Sites," the article revealed that inspectors "found mice and water bugs
scurrying in kitchens, rotten food, half-cooked hamburgers and cafeteria
employees who couldn’t wash their hands because sinks were inaccessible."

Eight out of 10 public school cafeterias in Metro
Detroit were found to be in violation of one or more critical health
regulations, putting many children at risk for food-borne illnesses. Two hundred
public schools — all in the Detroit area — were cited for at least six critical
violations when inspectors made a sweep of the schools. Cockroaches, flies,
spoiled food and staphylococcus bacteria were common.

Incredibly, a survey by The News over a three-year
period found that "Hundreds of children have fallen ill from bad school food"
while many others "are believed to get sick in ways that go unreported."

The problem is not peculiar to Detroit’s public
schools. The same article points out that schools in New York City (and by
inference, those in other big cities as well) are plagued with similar problems.
Edward Stancik, a New York Special Commissioner who investigated the schools,
had this to say: "School officials don’t seem to get it. Kids are getting sick,
workers are untrained, food is uneatable."

By contrast, nearby schools with privatized
cafeterias look pretty good. The city of Hamtramck, which is completely
surrounded by the city of Detroit, has "one of the cleanest cafeterias" in the
area. It’s managed by a private firm that inspects the food service facilities
it manages on a monthly basis and requires workers to take a food handling
class. Cafeterias run by the Detroit Public Schools are inspected only once a
year and typically require only the managers (not food service workers) to be
trained in safe handling of food.

The great majority of public school cafeterias are
not privatized — representing a huge potential market for firms able to offer
lower costs and improved service, and a potentially safer environment for
children. What on earth makes anyone think that government restaurants are
better than private ones?

Private food service companies are usually very
successful at what they do because they know the can lose the business quickly
if they turn in poor performance. And, in many places, they feel the competition
from nearby fast-food restaurants that attract students in the higher grades.
Says Paul Kelly, business manager for the Pocono Mountain School Board in
Sweetwater, Penn., "Companies can offer more resources. You get the clout and
economies of scale in purchasing. You get research and insights into products
such as milk and biodegradable materials." Those are the facts I shared, in so
many words, with my audience. If my reading of the consensus at the end of the
meeting is accurate, I think it worked.

That was one small battle in a great big war of
ideas that the advocates for free markets are waging every day of the week. It
made me appreciate an important fact: winning the war requires that we
just don’t let the other side get away with judging free markets against
perfection while they judge their own deficient prescriptions against mere good
intentions.

(Author’s postscript: This
past summer, the Mackinac Center conducted its fifth survey of
Michigan school district privatization. It showed that more than 40 percent
of the districts in the state contract for at least one major support service, a
new all-time high. Nearly 90 percent of the districts that contract for one of
the three main noninstructional services — food, custodial or janitorial —
reported they were satisfied with the results, and 78 percent reported saving
money. Food service remains the most frequently outsourced function, with 164
districts — or 29.7 percent of all districts — reporting having contracted
either management or operation of their program.)

#####

Lawrence W. Reed is
president of the Mackinac Center for Public Policy, a research and educational
institute headquartered in Midland, Mich. Permission to reprint in whole or in
part is hereby granted, provided that the author and the Center are properly
cited.